However, economists agree that we shouldn't jump to any
conclusions based on this one report.

"Surely this flash PMI has quite big market impact and markets
have already been hit today," said Bank of America Merrill
Lynch's Ting Lu. "However, our suggestion is still to downplay it
due to the poor quality of this HSBC flash PMI in the year
beginning. The survey period of the HSBC flash PMI was 12-18 Feb,
but the first six days in February are national holidays and many
SMEs, which could be the majority of the HSBC PMI sample, were
not open until mid-Feb, so the quality of this flash PMI could be
quite low."

"Also note that PMI data are heavily seasonally adjusted, but the
seasonal adjustment is quite inaccurate due to the different
timing of Chinese New Year holidays and short record (since year
2005)," added Lu. "Actually the HSBC PMI did a poor job in
predicting turning points of the Chinese economy in the past two
years."

The HSBC's PMI is computed using monthly replies to
questionnaires sent to purchasing executives.

"The sample period is very short, covering only seven days (12-18
February) according to the index's compiler, Markit, with a
response rate of approximately 85%-90% our of a total sample of
about 420 manufacturers," said Barclays' Jian Chang and Jerry
Peng, who also acknowledged many of Lu's criticisms.